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SEBI gets 'investor' unfriendly - Views on News from Equitymaster
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  • Jun 29, 2009

    SEBI gets 'investor' unfriendly

    If the SEBI were to get its way through, some days later, you will be reading our pre-open commentaries almost an hour earlier than you do now. This is given that the market regulator is contemplating increasing the trading hours for Indian markets by around 2 hours and 25 minutes. From the current schedule of 9.55 am to 3.30 pm, the cash and derivative markets will then remain open from 9.00 am to 5.00 pm.

    The rationale SEBI (Securities & Exchange Board of India) gives for proposing increase in trading time is that this would give market participants in India a better chance to 'react' to development in global markets.

    Well, at a time when the SEBI still needs to go a long way in establishing better safeguards for minority investors and promote equity culture by way of educating investors on long-term investing, increasing the trading time so that traders are better equipped to track daily global developments doesn't make material sense.

    Anyways, this proposal, which is based on the feedback received on a discussion paper floated by SEBI, is likely to be taken up with the Secondary Market Advisory Committee (SMAC), which consists of representatives from SEBI itself along with some investor groups, stock exchanges and other market participants. These representatives will debate the proposal and send it back to the SEBI, which will then take the final decision.

    For the broking community, this would mean that their infrastructure needs to be in place to handle the long trading hours. And for banks and financial institutions, this would mean keeping offices open for the extended duration.

    For you, dear investor, this would mean longer hours to see Mr. Market in action who, with his baggage of stock quotations, will have a greater chance of frightening or enticing you. And, least to say, for many who are glued to the stock ticker on a minute by minute basis, this would mean lesser productivity at work as more time will be spent in tracking how stocks are doing.

    SEBI itself agrees (though indirectly) that this proposal has not really been made with an intention of benefiting the 'investors'. As the regulator's discussion paper on this proposal says, "In a world where different exchanges are competing with each other to increase participation, it is imperative that the Indian markets align themselves to global markets to attract such trading interest. Extension of market hours would enable market participants to execute trading strategies in Indian markets...which otherwise would have been executed outside India."



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